AAT vs ACCA – How to choose an accountancy qualification?
When choosing which accounting qualification to study it is important to understand the current position of the applicant. It depends very much on the current academic status of the individual and their eventual goal. Both qualifications are valuable to your future career path. The AAT qualification is an entry-level qualification that was set up to encourage students at school to get a head start in learning accounting. It can be studied from the age of 16 and is used as an introductory qualification for young school leavers but also as a key tool for those joining the profession as part of a career change in later life. It leads to the status of being an accounting technician. The ACCA qualification leads towards full professional status and can be pursued after leaving school, given certain minimum qualifications are met or it is open access at mature entry.
How do they differ?
AAT is the lower level qualification designed to prepare the student for roles within an accounting environment. This means that during the qualification you will learn the detail needed to perform accounting tasks in keeping books, preparing financial statements, managing tax issues and more. This is why employers are often very keen to employ AAT students as the skills that they learn are directly linked to the needs of the company. Furthermore, the AAT exams focus on doing relatively simple transactions well. This means that the student will become highly proficient at those in-demand skills. Upon completion of your AAT studies, you may decide to stop studying given that you have a highly marketable accounting qualification. Alternatively, you may decide to use this qualification to gain exemptions to further professional exams such as ACCA.
ACCA is a professional accounting qualification which leads you to become a Chartered Certified Accountant with full professional status. As such, the exams extend to a higher academic level that the AAT. You can start studying ACCA direct from school, given you have the appropriate qualifications. It is also quite common to start the ACCA qualification after university. You will gain exemptions for some of the papers if your degree is related to the skills needed in accounting. ACCA is globally recognised as one of the most popular accounting qualifications in the world.
So, we may see the qualifications as being complementary rather than in competition with each other. If you are more highly qualified, you may look to start ACCA immediately. Alternatively, if you have limited accounting knowledge, you may wish to start with AAT. This will allow you to build a foundation of knowledge and then potentially continue into ACCA if your studies go well.
Let’s have a look at each qualification in detail:
What is the AAT qualification?
The Association of Accounting Technicians (AAT) is one of the leading accounting bodies in the UK. It has a presence in over 90 countries and has more than 120,000 members.
The AAT qualification aims to equip students with the necessary skills and knowledge to assume the role of an accountant within any organisation. AAT is comprised of three accounting qualifications: Foundation Certificate, Advanced Diploma and Professional Diploma. It also includes short courses which teach students bookkeeping skills.
Short courses in bookkeeping skills include:
- Foundation Certificate in Bookkeeping (Level 2, CIB);
- Foundation Award in Accounting Software (Level 2, AIAS);
- Advanced Certificate in Bookkeeping (Level 3, CIB).
The AAT Foundation Certificate helps students acquire a broad range of knowledge in fundamental accountancy principles. These include how to prepare a trial balance, costing, how to use accountancy software and double-entry bookkeeping. Students who qualify from this certification programme could work in one of the following positions: payroll administrator, finance assistant, payable clerk and accounts officer. This certification usually takes between six months and 12 months to complete.
The Advanced Diploma qualification helps students build on the knowledge they acquired in the Foundation Certificate. Students will already be familiar with crucial and complex accounting techniques, advanced bookkeeping, financial processes and procedures, ethical obligations and practices for accountants, including preparation of final accounts. This qualification, typically, takes six to 12 months to complete.
The AAT Professional Diploma equips students with skills and knowledge relating to complex accounting theories. The course includes topics such as taxation, accounting systems, preparation of financial statements, management accounting and budgeting. It can take anywhere between 12 to 18 months to complete this qualification. Students who have obtained the AAT Professional Diploma can work in the capacity of tax manager, finance analyst, accountancy consultant or forensic accountant.
What is the ACCA qualification?
The Association of Chartered Certified Accountants (ACCA) is a globally recognised accountancy body with a presence in over 52 countries and more than 208,000 qualified members to its credit.
The ACCA qualification trains students to become qualified accounting professionals with a broad understanding of current accounting practices, standards and tools. ACCA-qualified professionals are recognised worldwide, making it easier for them to acquire jobs with top accountancy firms and other organisations.
The ACCA course is comprised of 14 papers that are categorised into four groups and three levels. Students who enrol on the ACCA course will study the following modules:
The ACCA Knowledge Level is the Introductory Level for ACCA which is similar in academic standing to Level 4 AAT. There are three papers introducing the core elements of accounting and laying out the basic knowledge needed for further study at higher levels. These exams may be taken on demand.
The ACCA Skills Level continues the fundamentals level andconsists of six papers which cover the core topics required of a professional accountant including accounting, tax, law, audit and financial accounting. These are taken at one of four sittings spread throughout the year and it is normal for a student to take one paper per sitting.
The ACCA Essentials Level is the start of the Professional Level consists of two papers and covers the core subjects of strategy and corporate reporting. At this level, the type of exam requires more depth of answer including analysis and evaluation. Again, these exams are taken at one of four sittings a year.
The ACCA Options* include four papers that build on knowledge learnt at the skills level. You must choose two papers depending on what you are interested in studying and perhaps reflecting your future career choice.
How to choose an AAT or ACCA accounting qualification?
The choice will be highly dependent on your starting point. Simply, if you are entering accountancy training with very limited accounting skills then it would make sense to pick up the AAT qualification first as it gives an unmatched introduction to the skills needed at a basic level. If you have a higher academic starting point, you may decide to go straight on to ACCA studies.
Both qualifications require time and effort to pass the exams. That being said, the amount of studying required for AAT is less than that required by someone studying ACCA. The AAT papers are straightforward and if you do the work you will expect to pass them with some ease. When looking at ACCA, a whole different level of commitment is required. The pass rates on individual papers hover around 30 to 45 per cent which means that you must put considerable effort into each exam to be successful.
You may be in a situation where you need a basic accounting understanding to allow you to run your own business or work within an accounting role. The AAT qualification is perfect in that instance and, as stated earlier, it is highly sought after by employers. If you wish to move into senior management, you will need to qualify with a higher, professional level such as ACCA.